Friday, April 3, 2009

Estimating Taxes on New Construction

On his excellent blog,, @properties agent Bob Darrow offers some tips on how to estimate the property taxes on a unit you buy in new construction. Excerpts:

When you buy a new construction house, townhouse or condo, or maybe in a new condominium conversion of an existing building, you will not know what the property taxes are. You will have to guess. The reason: the tax assessment has not been calculated for the new type of property.

In popular north-side neighborhoods, a rule of thumb will be 2% of the purchase price. Odds are, your bank is going to use the 2% figure to decide whether you can afford your new home. And the bank is going to start using the 2% figure for your tax escrow.

In reality, your tax bills will most likely be lower. In the Lakeview neighborhood, you can expect your taxes to come in at around 1.6% of purchase price. In Lincoln Park, around 1.75% of purchase price.

As in life, however, there are no guarantees.

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